ZAGREB, January 2, 2019 - Finance Minister Zdravko Marić said on Wednesday the enforced state guarantees for the Uljanik shipyard, in the amount of some 2.5 billion kuna, were paid on the last day of 2018 but that this did not endanger public finances in any way.

"That's only the principal. There is certain interest we also have to service, which leaves the part we expect we will have to pay this year," he told reporters when asked about obligations stemming from state guarantees for the ailing dock.

Marić said the amount of the interest to be paid would be known once the rates were calculated. "All the amounts are large," he said, adding that he was "not pleased with this situation at all" but that, as far as the government was concerned, this was in the past.

He said someone else should ask and answer why such guarantees were issued and how the money was spent. "It fell to us to service them," he said, adding that a state guarantee was a state institute which, when enforced, meant that "taxpayers are obliged to service that debt."

Marić said he was pleased "that we have reached such a level of public finance stability that, despite the enforced guarantees and the high amounts we paid and are paying, public finances haven't been endangered at all."

He said this would be evident when the relevant institutions published official public debt data. According to his ministry's projections, the public debt at the end of 2018 was down by an additional three percentage points, he added.

More news on the Uljanik shipyard can be found in our Business section.

ZAGREB, December 31, 2018 - A total of 510 packages with food and hygiene products worth 102,000 kuna in total were given to neediest employees of the Uljanik shipyard in Pula on December 18-21, the town government said on Monday.

The Pula Humanitarian Network helped other local ailing companies in the same way in the past and among the many donors were the workers of Uljanik.

The Network has asked donors for contacting its associations so as to ensure groceries for those in need in the period ahead.

Nearly every town and municipality in Istria County has shown solidarity with the ailing dock and its many workers by donating money.

Istria County and the Town of Pula have each donated 10,000 kuna for the "Uljanik for a Better Tomorrow" humanitarian drive, the town government said.

More news on the latest events in Uljanik and other Croatian shipyards can be found in our Business section.

ZAGREB, December 29, 2018 - Assistant Economy Minister Zvonimir Novak met with unionists on Friday to inform them about the situation at the Croatian shipyards, saying afterwards that several potential partners were checking the docks' data and that binding offers were expected after January 18.

After Uljanik's management decided that the Kermas Energija company is no longer a potential strategic partner, the search for a new one has begun, Novak said.

He said several reputable European and international shipyards had contacted them and were satisfied with the docks' technical equipment and workers' knowledge, but they wanted to see the books before possibly making a binding offer.

Novak said they were mainly interested in Rijeka's 3. Maj and some for the whole Uljanik Group, of which 3. Maj is part. "The data room will remain open until January 18 and in the week after that we expect that binding offers will arrive in Uljanik d.d."

Asked how bankruptcy proceedings in 3. Maj might affect the procedure, Novak said bankruptcy was neither simple nor cheap and that if it included reorganisation, it should be financed.

SSSH union federation president Mladen Novosel said management were the most responsible for the situation at Uljanik and 3. Maj. He said they should have reacted sooner, instead of ending up with no money for wages and material and having jobs cancelled.

The only chance is that one of the interested strategic partners "shows up" by January 25, he said, adding that he does not expect bankruptcy proceedings to be opened in the next three weeks and that they will not be unavoidable after January 25 either. He urged management to pay a minimum wage to the docks' workers until a strategic partner is found.

3. Maj unionist Juraj Šoljić hopes this dock will not go into bankruptcy and that a strategic partner will be found by January 25 that will continue with shipbuilding at Rijeka.

Đino Šverko, a unionist at Pula's Uljanik dock, said they wanted a strategic partner that would focus on shipbuilding and on saving shipbuilding in Pula and Rijeka. He called on the government to urgently adopt an emergency aid measure.

More news on the Croatian shipyards can be found in our Business section.

ZAGREB, December 28, 2018 - Unionists expect to receive a final answer to the question as to whether the government wants Croatian shipbuilding industry or not at Friday's meeting at the Economy Ministry on the future of the Uljanik and 3. Maj docks, the president of the SSSH union federation said ahead of the meeting.

"Today we expect both Minister Horvat and the government to finally decide if they want Croatia's shipbuilding or not," Mladen Novosel said.

Uljanik and 3. Maj are the backbone of Croatia's shipbuilding and industry, he said, adding that he did not expect the two docks to continue operating as they had until now, but that he was confident they could function under a new model.

"They can definitely function... on the strategic partnership model, the majority owner model, by building ships that are competitive both on the global and the European market."

Commenting on possible bankruptcy proceedings in 3. Maj, Novosel said the Commercial Court in Rijeka had three months to decide whether to launch them. "The next 30 days are the final deadline for the government to do its best and say that it has found a strategic partner or that there's no strategic partner."

Another unionist, Sinisa Košić, too said the court would decide whether 3. Maj would undergo bankruptcy proceedings. He hopes it will not happen, but if it does, he is confident shipbuilding can resume on the dock's premises.

More news on the Croatian shipbuilding industry can be found in our Business section.

ZAGREB, December 27, 2018 - Economy Minister Darko Horvat said on Thursday the Financial Agency (FINA) would request the launching of bankruptcy proceedings in Rijeka's 3. Maj shipyard, and that his ministry had sent invitation letters to five addresses in the search for a strategic investor in the Uljanik shipbuilding group, of which 3. Maj is part.

Responding to questions from the press, Horvat said there were no conditions for launching bankruptcy proceedings in the group but that they did exist for 3. Maj and that, according to his information, "FINA will launch bankruptcy proceedings."

He said a virtual data room for the group was opened today. "We will give to all those we have sent letters the opportunity until January 16 to see and collect all the necessary relevant information, and I expect that by the end of January we will have responsible and financially very concrete bids for both Uljanik and 3. Maj."

Asked when bankruptcy could be launched in 3. Maj, Horvat said "perhaps even today."

Commenting on a restructuring plan for the Uljanik Group and 3. Maj's fate, he said it was "necessary to choose a new strategic partner," after businessman Danko Končar is no longer an option, "a partner that will be able to financially back the restructuring."

Horvat said no one had registered to see the data room in Pula yet but that the Economy Ministry had sent invitation letters to five addresses and that it expected to receive replies in the days ahead. The letters were sent to Fincantieri, DIV, Damen, UHC and Ukraine's Smart Holding, he said, adding that replies had been received from Chinese shipyards.

Last week Uljanik broke a strategic partnership with Končar's Kermas Energija and decided to start looking for new partners willing to in invest in the group's restructuring. The group invited interested investors to express interest in strategic partnership and recapitalisation.

More news on the Croatian shipbuilding industry can be found in our Business section.

ZAGREB, December 17, 2018 - Most of the workers at the Uljanik shipyard in Pula returned to work on Monday after a two-week strike over unpaid wages.

They are still owed the difference between the minimum and full wage for September and October, and unless they are paid the minimum wage by the end of this week, they will also be owed the full wage for November.

"We still don't know what will be with the remainder of our wages and when they will be paid," strike committee chairman Boris Cerovac told Hina. "The strike has been put on hold, but the strike committee reserves the right to call it again at any time," he added.

"The workers have returned to work, but they are visibly dissatisfied and angry with this situation. This agony has been going on for too long, and there's no news of any progress regarding a final restructuring plan and a strategic partner," Cerovac said.

He said that the strike committee was meeting with the management again today to get a confirmation that the minimum wage for November would be paid by the end of the week.

More news on Croatian shipyards can be found in our Business section.

December 6, 2018 — The search for the Uljanik Shipyard’s savior didn’t reach into the depths of the Croatian or European business community. In fact, it didn’t go far at all. The government and current management reportedly settled on the man already holding the position since March: Danko Končar, a billionaire mining magnate and one of the richest members of Croatia’s diaspora.

The ailing shipyard’s board and government’s Economic Ministry are reportedly drafting a restructuring program which will be sent to Brussels, designed to end a year-long effort to map Uljanik’s way out of HRK 4.5 billion of debt. The obligations include substantial state guarantees which could put a dent into the Croatian budget if unpaid.

The Uljanik Group’s dissolution would cost thousands of jobs at a time when the nation can ill-afford another export-oriented economic sector collapsing.

“I would say this is now close to the end,” said president of Uljanik’s Management Board Emil Bulić. “It is time for us to reach a final decision.”

Končar claims his company Kermas Limited cannot begin its intervention until both the Croatian government and European Commission approve the plan.

Končar won't use his estimated $15 billion in net worth to directly bail out Uljanik. The new program doesn’t equate a strategic parter with financing, according to the Zagreb native.

The 76-year-old Končar added he’s willing to share the strategic partner role with others, or even step aside if necessary.

When asked if Uljanik is sustainable as a shipbuilding operation, Končar reportedly said he’s “always optimistic.” Earlier restructuring proposals suggested ditching the shipyard wholesale for real estate and tourism projects.

The shipbuilding industry's seemingly-perpetual crisis has been an albatross around the neck of successive Croatian governments. Former Prime Minister Zoran Milanović was among several to declare the ailing shipbuilding group’s restructuring “done” — in 2015.

“Croatia has not only saved, but has also strengthened its shipbuilding industry,” he said at the time, right after the group added 22 ships to its order books. The orders would keep the shipyard busy until 2018. Croatia's shipyards enjoyed a Renaissance. It didn't last.

The long list of profitable orders began petering out in late 2017, with few new ones taking their place. Uljanik Group’s 2017 losses totaled 680 million kuna, despite a growth in revenue over the previous year. As soon as the calendar flipped to 2018, Croatia’ largest shipyard was in crisis. The indebted shipyards were soon being compared to the flailing conglomerate Agrokor.

The shipyard needed an urgent injection of cash, setting off a year-long back-and-forth between a Croatian government trying to rescue the shipyards, and European rules limiting state aid.

The true scope of Uljanik’s financial distress emerged this summer, after the drawn-out search for a generous, cash-flush strategic partner instead produced a profit-first fiscal disciplinarian: Končar. The billionaire was already leading another shipyard, Brodotrogir in Split, through a messy restructuring. Eventually, Ulanjik stop paying its employees.

The lack of regular paychecks led to several union-backed strikes by workers at both Uljanik in Pula and 3. Maj in Rijeka.

The first attempt at a restructuring was sent back by the European Commission, with 75 objections. Some plans to rescue the shipyard envisaged a total abandonment of shipbuilding, instead turning to real estate.

The company has been living in triage ever since, seeking a strategic partner for months. Italian firm Finacantieri and Ukraine’s Smart Holding have been bandied about, alongside Končar, as potential partners. Yet neither has officially signed on.

The government’s recently-passed budget includes a minimum HRK 2.5 billion in enforced guarantees allocated to the Uljanik shipbuilding group.

Conversations between Končar and striking unions three days ago did not yield results, according to Boris Cerovac, leader of the Jadransko Union.

“[Končar told us] if we think of a ‘strategic partner’ as someone who will gives us advice, then yes we have that kind of strategic partner,” Cerovac said after the fruitless meeting. “If we think we have a ‘strategic partern’ who will give us money, that we do not have.”

That meeting ended with yet another strike by Uljanik’s workers.

Uljanik’s union leaders claim time is running out to cobble together a deal, as workers continue to clock in and out without receiving a full paycheck since August. (They have, however, gotten minimum wages of about HRK 2.750 for the month of October.)

The latest proposed rescue of Uljanik still leaves a door open for the company's other ailing shipyard — 3. Maj — to join the restructuring program. It also gives Končar leeway to back out of the deal if any changes or additions don’t suit him, Assistant Minister of Economics Zvonimir Novak said, according to Nacional.

Končar was coy about any other shipyard’s potential involvement, especially 3. Maj, which some claim is so close to Uljanik it creates needless competition. Končar disagreed, saying the shipyards' proximity could lead to synergy, not a duplication of services.

“One function can be handled in one shipyard, and another in the other one,” he said.

For more on the Uljanik shipyard crisis, click here.

ZAGREB, December 3, 2018 - Economy, Entrepreneurship and Crafts Minister Darko Horvat said on Monday that the strike at Uljanik shouldn't have been launched once again and although it was the legitimate right of workers to strike, that industrial action would not solve the problems of the dock.

"In my opinion, this strike shouldn't have occurred. Despite the full and legitimate right of every worker to strike, I think that the strike won't solve Uljanik's problem," Horvat told reporters on the margins of an award ceremony for the best small and medium-sized entrepreneurs in 2018, organised by the Večernji List and Poslovni Dnevnik dailies.

Workers at the Pula-based dock started striking again on Monday and the head of the strike committee, Boris Cerovac, said that they were compelled to do so because workers haven't been given any positive signal from the management board and that a meeting with Prime Minister Andrej Plenković and Economy Minister Darko Horvat had not been held.

Asked to comment on the new strike at the dock, Minister Horvat said that unlike Cerovac whom the minister criticised for passing the buck from Pula to Zagreb, he wouldn't do that too.

Horvat added that for some time now he had been trying "to find a strategic partner that will invest in shipyards together with the government."

Alongside everything that the state has done for Uljanik and its workers this year, this type of pressure by the union, primarily Cerovac, is putting on the government "isn't regular nor fair," Horvat said.

He reiterated that problems exist but that at the moment, unlike other stakeholders in that dispute, he is looking for real strategic partners who have the financial ability to support the restructuring, he said.

Asked by reporters whether he was any closer to finding a strategic partner and what was about Danko Končar, the minister said that at the moment the government and ministry were not conducting talks with Končar.

For more on the Uljanik shipyard crisis, click here.

ZAGREB, November 26, 2018 - Members of the striking committee in the 3. Maj shipyard said on Monday the strike will continue in the Rijeka shipyard, as will their fight for the bailout of 3. Maj.

A member of the striking committee, Juraj Šoljić, said the striking committee's news conference was prompted by a press release and threats from the management of the Pula-based Uljanik dock. The Uljanik management as well as the management boards of all members of the Uljanik Group on Friday accused the striking committee of obstruction of the conciliation process in the 3. Maj dock and violation of a number of laws and internal regulations.

The Economy Ministry is expected to submit a restructuring programme for Uljanik on Tuesday, a programme that workers and trade union representatives know nothing about.

"We will not stop, or back down on our demands and payout of salaries, we demand information from the Uljanik management, we want them to inform us of their intentions regarding the salvaging of 3. Maj," Šoljić said.

He also said that representatives of Croatian metal workers' trade unions would meet their colleagues from Fincantieri and the Fincantieri management in Trieste on Tuesday. The Fincantieri shipbuilding company has been mentioned as a possible strategic partner in 3. Maj.

The 3. Maj shipyard is part of the Uljanik shipbuilding group.

For more on the Croatian shipbuilding industry, click here.

ZAGREB, November 24, 2018 - Minister of Economy, Entrepreneurship and Crafts Darko Horvat said on Saturday that he had received the restructuring plan for Uljanik shipyard and that he would have more specific information after a meeting with the management board on Tuesday.

"The draft plan has come in for analysis by the Economy Ministry. We will respond to those figures on Tuesday. The management board has been invited to a brief meeting in the Ministry on Tuesday and after that meeting in the afternoon I will give you all relevant information on how to proceed with that programme and what partner we will enter into concrete talks with," Horvat said.

In July, the European Commission sent 75 objections to the previous restructuring plan. The present plan was prepared by the new management board with Emil Bulić at the helm.

Minister Horvat said on Friday that two European groups were interested in Uljanik's restructuring - Ukraine's Smart Holding and Fincantieri from Italy.

Horvat was attending the "Coffee with Citizens" event and said that this was the 11th event organised with the aim of informing citizens of their consumer rights and answering their questions regarding consumer problems. "That is a very interesting area for every citizen in Croatia but also in the area of the EU," he added.

The amendments to the Consumer Protection Act proposed by the government are aimed at providing counselling and educating consumers and I hope that consumers and retailers will use the opportunities being provided, the minister said.

He called on citizens to be careful and to be informed of their rights when purchasing something. "If anything that is unallowable occurs, they have the right to send a written complaint on the spot or on-line, if the product doesn't correspond to its specifications. If they do not receive a response from the retailer, they can return the goods and the retailer is obliged to intervene within 30 days...if the retailer does not respond to the complaint, there are institutions that every consumer can turn to and seek help either in the form of arbitration or counselling," he said.

Horvat said that until such time that he was appointed a minister, he too had sent complaints and returned goods, "sometimes successfully, sometimes not."

For more on the Uljanik shipyard, click here.